Finding Text
Material Weakness Segregation of duties. Criteria An effective system of internal accounting control necessitates an adequate segregation of duties so that no one individual handles a transaction from its inception to its completion. Condition One position within the finance group had access to the blank checks, the ability to process invoices, and the responsibility for reviewing the vendor statements. Cause Due to the size of the finance group, we found some critical duties are combined and assigned to the available employees. Effect The internal control system is more susceptible to errors and other irregularities, either intentional or unintentional, not being discovered. Recommendation Management should continue to review staff responsibilities and analyze where segregation of duties can be established and maintained. A final cross check of the invoice, purchase order, and check requisition should be done by someone that does not have access to any of the processes involved in generating the source documents. Management's Response and Corrective Action See attached response.